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Have Tech, Will Shop

BY Michelle Pagliarulo

In a recent study conducted by the Newton Upper Falls, Mass.-based Retail Systems Alert Group, retailers reported that their No. 1 store-related challenge was responding to customer complaints about the in-store experience. Since bricks-and-mortar retailers are still barely rating a C+ in customer service, they clearly have reason to be concerned.

All retailers, including “retail winners,” or those who outperform their peers in year-over-year comparable-store sales, are concerned about these complaints. And the phenomena of social networking, open blogs and other Internet-related forums are making those complaints accessible to current and future customers.

While overcoming these kinds of challenges is not easy, retail winners appear to have found a key to improving the in-store shopping experience: They are empowering their employees and customers with technology.

While most retailers believe the best opportunity available to improve the in-store experience is through a mix of bringing the right product to the right location at the right time and for a reasonable price, a definitive 90% of retail winners said they are improving customer satisfaction by educating and empowering their in-store employees through the use of technology.

In addition, these same retail winners believe the second-greatest opportunity for improving the in-store experience is adding self-service customer-facing technologies ranging from self checkout to self-service kiosks, so that customers can take care of themselves.

Make no mistake that this data does not discount that in the minds of these retail winners, product mix and personalized attention from employees is still important. More importantly, this group believes that their primary opportunities lie in using technology to facilitate the in-store shopping experience.

Along with providing technological support to employees and customers, the most critical step a retailer can take toward becoming more customer-centric and improving their top line is to get store management back on the selling floor.

This can be a successful business strategy as long as retailers can provide their managers with the critical data and alerts they need to respond to events that may be beyond their line of sight. This point alone highlights the critical importance of adding mobility applications at store level.

Michelle Pagliarulo is research manager of Newton Upper Falls, Mass.-based Retail Systems Alert Group.

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Sears comps hurt by energy costs

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006.

“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ ceo and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”

Domestic comparable-store sales declined 3.9% during the first quarter of fiscal 2007. Sears domestic comparable-store sales declined 3.4% for the quarter, while Kmart comparable-store sales declined 4.4%. We believe these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. Kmart experienced lower transaction volumes across most merchandise categories, most notably within home goods, health and beauty products, and food and consumables. Similarly, Sears domestic recorded comparable-store sales declines across most merchandise categories and formats, with a notable decline in home appliance sales, which we believe reflects both a slower U.S. housing market and the impact of increased competition.

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Big Lots 1Q net sales up 3.4%

BY CSA STAFF

COLUMBUS, Ohio Big Lots today reported first quarter fiscal 2007 income from continuing operations of $29 million, or 26 cents per diluted share, compared to income from continuing operations of $14.5 million, or 13 cents per diluted share, in the first quarter of fiscal 2006. Including the impact of discontinued operations, first quarter fiscal 2007 net income totaled $28.8 million, or 26 cents per diluted share, compared to $13.7 million, or 12 cents per diluted share, in the prior year.

Net sales for the first quarter ended May 5, increased 3.4% to $1.13 billion, compared to $1.1 billion for the same period in fiscal 2006. Comparable-store sales for stores open at least two years at the beginning of the fiscal year increased 4.9% for the quarter.

For the second quarter 2007, the company expects income from continuing operations of 7 cents to 10 cents per share versus income from continuing operations of 4 cents per share last year. Comparable-store sales are expected to increase 2% to 4%, compared to a 5.2% comparable-store sales increase recorded last year.

For fiscal 2007, the company expects income from continuing operations of $1.25 to $1.30 per share versus income from continuing operations of $1.01 per share last year.

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